In suspending BP, EPA does what drilling regulators would not

When BP agreed to plead guilty to 12 felony counts related to the Deepwater Horizon disaster a few weeks ago, I made the point that the felonies mattered more than the fines. Today, the U.S. Environmental Protection Agency showed why.

It’s not clear what the financial impact will be, but the decision sends a strong message to BP — as well as other companies operating in the Gulf — about the importance of process safety. The EPA was designated as the lead federal agency in making the determination for the suspension. In making it’s decision, its done what federal regulators with the Bureau of Safety and Environmental Enforcement have steadfastly refused to do: hold operators economically accountable for their actions.

In announcing its decision, the EPA said took the action because of “BP’s lack of business integrity as demonstrated by the company’s conduct with regard to the Deepwater Horizon blowout, explosion, oil spill, and response.”

Actually, the EPA’s decision is routine in cases where companies plead guilty to criminal activity. Although BP entered a not-guilty plea in a New Orleans federal court on Tuesday, the company’s attorneys said it’s a procedural move and that BP still intends to honor the terms of its agreement with the government, which includes pleading guilty to 11 manslaughter counts related to the death of rig workers.

The loss of future business, though, puts some teeth in the settlement. The Gulf is one of BP’s most lucrative areas of operation, and a key part of restructuring plan. While it can continue its current operations there, it won’t be able to compete for new opportunities. The folks at BSEE should take note. Lost future business matters more companies than fines and or getting dinged for “incidents of non-compliance.”